TORM plc Long Term Incentive Program

Rhea-AI Summary

TORM plc (NASDAQ: TRMD) has announced a significant Long Term Incentive Program, granting restricted share units (RSUs) to select employees and Executive Director Jacob Meldgaard. The program includes 1,293,434 RSUs for employees and an additional 500,000 RSUs for Meldgaard, with a strike price of one US cent and vesting date of October 1, 2028.

The theoretical market value of the RSU allocation is USD 40.0 million, calculated using the Black-Scholes model with a 42.5% share volatility and a risk-free rate of 1.91%. Additionally, TORM has moved forward the vesting date of its March 2023 Additional Retention Program from March 1, 2026, to November 7, 2025.

[ "Total RSU program valued at USD 40.0 million demonstrates significant investment in employee retention", "Strike price of one US cent is highly favorable for participants", "Long-term vesting period until October 2028 promotes employee retention and alignment with company goals" ]

Positive

• None.

Negative

• Program will impact P&L with costs of USD 40.0 million over four years
• Potential dilution for existing shareholders upon RSU conversion
• Significant expense of USD 13.3 million per year in 2026 and 2027

Insights

Compensation Analyst

TORM's $40M RSU program grants key employees/CEO substantial equity incentives vesting in 2028, with P&L impact spread through 2025-2028.

TORM has announced a substantial executive retention initiative through restricted stock options valued at $40 million. The company is granting 1,293,434 restricted share units (RSUs) to certain employees and an additional 500,000 RSUs to Executive Director Jacob Meldgaard, all vesting on October 1, 2028. With a nominal strike price of $0.01, these effectively represent deferred equity compensation rather than traditional performance-incentive options.

The Black-Scholes valuation of these RSUs reveals several important details: the assumed 42.5% share volatility suggests the company acknowledges significant stock price fluctuations typical in the shipping sector. The program's accounting impact will be spread across four fiscal years, with the heaviest expense recognition in 2026-2027 ($13.3 million each year), while 2025 will see a $3.6 million charge and 2028 will bear $9.7 million.

Notably, TORM has also accelerated the vesting of a previously granted retention program from March 2026 to November 2025, consolidating their retention timeline. This acceleration, combined with the new grant, indicates a strategic approach to executive compensation that balances immediate retention needs with long-term alignment. The strike price structure essentially guarantees the awards will have value regardless of modest stock price fluctuations, making this primarily a retention tool rather than a performance incentive tied to specific business outcomes. The four-year vesting period without apparent performance conditions suggests TORM is prioritizing stability in leadership during what they likely anticipate will be a crucial period in the shipping industry cycle.

HELLERUP, Denmark, Sept. 23, 2025 /PRNewswire/ -- In accordance with TORM plc's ("TORM", Nasdaq ticker TRMD or TRMD A) Remuneration Policy adopted by the Annual General Meeting of TORM on 14 April 2021 and the authorization granted at the Annual General Meeting of TORM on 11 April 2024, the Board of Directors have extraordinarily decided to grant certain employees ("Participants to the Additional Retention Program") and Executive Director Jacob Meldgaard (together with the Participants to the Additional Retention Program the "Participants") restricted share units ("RSUs") in the form of restricted stock options.

The Participants to the Additional Retention Program will be granted a total of 1,293,434 RSUs, and, subject to vesting, each RSU will entitle the holder to acquire one TORM A-share. The strike price for these RSUs is set to one US cent and all the RSUs will vest on 01 October 2028.

In addition to the RSUs granted to the Participants to the Additional Retention Program, Executive Director Jacob Meldgaard will be granted a total of 500,000 RSUs on the same terms.

Holders of the RSUs will have no rights as a shareholder with respect to such RSUs until such time as the RSUs vest, are exercised and TORM A-shares are issued. The RSUs include certain adjustment and acceleration provisions and other terms customary for restricted stock option programs of this nature.

The theoretical market value of the RSU allocation is calculated at USD 40.0m based on the Black-Scholes model. The key assumptions for the calculation of the market value are:

• The strike price and the number of shares will not be adjusted for future TORM dividends paid in the ordinary course of business.
• The volatility of the TORM share is estimated at 42.5%.
• A risk-free rate of 1.91%. As a proxy for the risk-free rate, the yield on a Danish government bond with a matching maturity is applied.
• A share price of DKK 141.25 per A-share at the time of allocation.

The RSU allocation is expected to affect the P&L statement as follows:

In USDm	2025	2026	2027	2028	Total
Total	3.6m	13.3m	13.3m	9.7m	40.0m

 

Further, in March 2023, an Additional Retention Program was granted to certain employees and Executive Director Jacob Meldgaard with a vesting date set to 01 March 2026. This vesting date has been preponed to 07 November 2025.

Contact

Mikael Bo Larsen, Head of Investor Relations
Tel.: +45 5143 8002

About TORM

TORM is one of the world's leading carriers of refined oil products. TORM operates a fleet of product tanker vessels with a strong commitment to safety. environmental responsibility and customer service. TORM was founded in 1889 and conducts business worldwide. TORM's shares are listed on Nasdaq in Copenhagen and on Nasdaq in New York (ticker: TRMD A and TRMD. ISIN: GB00BZ3CNK81). For further information, please visit www.torm.com.

Safe Harbor Statement as to the Future

Matters discussed in this release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are statements other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. Words such as, but not limited to, "expects," "anticipates," "intends," "plans," "believes," "estimates," "targets," "projects," "forecasts," "potential," "continue," "possible," "likely," "may," "could," "should" and similar expressions or phrases may identify forward-looking statements.

The forward-looking statements in this release are based upon various assumptions, many of which are, in turn, based upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs, or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, our future operating or financial results; changes in governmental rules and regulations or actions taken by regulatory authorities; inflationary pressure and central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates; general domestic and international political conditions or events, including "trade wars" and the war between Russia and Ukraine, the developments in the Middle East, including the war in Israel and the Gaza Strip, and the conflict regarding the Houthis' attacks in the Red Sea; international sanctions against Russian oil and oil products; changes in economic and competitive conditions affecting our business, including market fluctuations in charter rates and charterers' abilities to perform under existing time charters; changes in the supply and demand for vessels comparable to ours and the number of newbuildings under construction; the highly cyclical nature of the industry that we operate in; the loss of a large customer or significant business relationship; changes in worldwide oil production and consumption and storage; risks associated with any future vessel construction; our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions planned; availability of skilled crew members other employees and the related labor costs; work stoppages or other labor disruptions by our employees or the employees of other companies in related industries;  effects of new products and new technology in our industry;  new environmental regulations and restrictions; the impact of an interruption in or failure of our information technology and communications systems, including the impact of cyber-attacks, upon our ability to operate; potential conflicts of interest involving members of our Board of Directors and Senior Management; the failure of counterparties to fully perform their contracts with us; changes in credit risk with respect to our counterparties on contracts; adequacy of insurance coverage; our ability to obtain indemnities from customers; changes in laws, treaties or regulations; our incorporation under the laws of England and Wales and the different rights to relief that may be available compared to other countries, including the United States; government requisition of our vessels during a period of war or emergency; the arrest of our vessels by maritime claimants; any further changes in U.S. trade policy that could trigger retaliatory actions by the affected countries; the impact of the U.S. presidential and congressional election results affecting the economy, future government laws and regulations and trade policy matters, such as the imposition of tariffs and other import restrictions; potential disruption of shipping routes due to accidents, climate-related incidents, adverse weather and natural disasters, environmental factors, political events, public health threats, acts by terrorists or acts of piracy on ocean-going vessels; damage to storage and receiving facilities; potential liability from future litigation and potential costs due to environmental damage and vessel collisions; and the length and number of off-hire periods and dependence on third-party managers.

In the light of these risks and uncertainties, undue reliance should not be placed on forward-looking statements contained in this release because they are statements about events that are not certain to occur as described or at all. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

Except to the extent required by applicable law or regulation, the Company undertakes no obligation to release publicly any revisions or updates to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Please see TORM's filings with the U.S. Securities and Exchange Commission for a more complete discussion of certain of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.

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21-2025 - TORM plc Long Term Incentive Program

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SOURCE Torm PLC

FAQ

How many RSUs did TORM (TRMD) grant in its 2025 Long Term Incentive Program?

TORM granted a total of 1,793,434 RSUs, with 1,293,434 RSUs allocated to employees and 500,000 RSUs to Executive Director Jacob Meldgaard.

What is the vesting date for TORM's 2025 RSU program?

The RSUs will vest on October 1, 2028.

What is the strike price for TORM's 2025 RSU program?

The strike price is set at one US cent per RSU.

How will TORM's 2025 RSU program affect the company's financials?

The program will impact TORM's P&L by USD 40.0 million total, spread across 2025 (USD 3.6m), 2026 (USD 13.3m), 2027 (USD 13.3m), and 2028 (USD 9.7m).

What happened to TORM's March 2023 Additional Retention Program vesting date?

The vesting date for the March 2023 Additional Retention Program has been moved forward from March 1, 2026, to November 7, 2025.